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Bank of Cyprus Group
Investor presentation
September 2016
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Source: EIU, MOF
(1) As of July 2016
(2) Average of European peers
(3) Subject to final decisions and regulatory approvals
Key messages
Dominant position in a recovering Cypriot economy; BOC is the
largest bank in Cyprus
2
Significant reduction in 90+DPD of €3,4 bn achieved since 2014
Strategic focus on core Cypriot business and expansion of UK
operations
World class Board of Directors with an experienced management team
Contemplated listing in London3 will enhance the stock’s profile,
improve liquidity and provide access to a broader investor base
Nearly normalised funding structure with €10,1 bn reduction in ELA
Strong capital position comparing favourably to European peers
Significant progress
achieved in
normalising the Bank
Strong market
position with a clear
strategy going
forward
• Strong local market insight
• Turnaround experience
• Proven track record of
delivering results
• Fulfilling commitment to list on a
major European exchange
11,4 1,3
Apr 2013 Sep 2016
ELA (€ bn)
GDP growth in Cyprus
CET1 ratio (fully loaded)
90+DPD ratio
53,2% 44,0%
Dec 2014 Jun 2016
13,6% 12,3%
BOC Peer avg²
1,6% 2,5%
2015 2016e-17e
Market share in Cyprus1
41,7% 29,1%
Loans Deposits
Peak
Strong leadership
Upcoming milestone
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The journey so far…
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Decisive actions and deleveraging have put the Bank on a firm path to
normalisation
March 2013:
• Sale of Greek operations
Sep 2013:
• AGM and election of new BoD
Nov 2013:
• Appointment of new CEO
Nov 2015:
• Extension of CEO appointment
Dec 2014:
• Relisting in Cyprus and Greece
Sep 2014:
• €1,0 bn share capital increase
Nov 2014:
• Election of new BoD
Mar 2016:
• Announcement of intention to list on the premium segment of LSE
Dec 2015:
• Changes to ECB provisioning assumptions leading to enhanced coverage
Sep 2015:
• Sale of Uniastrum and other Russian assets
Jun 2014:
• Laiki integration completion
Sep 2014:
• Sale of various Romanian assets
May 2014:
• Sale of Serbian exposure
Apr 2015:
• Sale of 95% stake in Marfin Diversified Strategy Fund
Apr 2014:
• Sale of Ukrainian operations
• Sale of 10% stake in Banca Transilvania
Oct 2013:
• Sale of Kyprou Asset Management
2013 2014 2015 2016
Jan 2015:
• Share capital increase: completion of Retail Offer
• Listing of the Retail Offer Shares and commencement of trading
Oct 2015:
• Covered bond becomes eligible asset for Eurosystem credit operations; ELA reduced to €4,5 bn
Oct 2014:
• Successfully passes the 2014 ECB CA1
4 (1) ECB Comprehensive Assessment
(2) Ex Laiki UK Loan portfolio
Jun 2016:
• Completion of voluntary exit plan for 359 personnel
Aug 2016:
• Cancellation of €1bn Government Guaranteed Bonds
Aug 2016:
• ELA reduced to €1,5 bn using customer and government deposits
Jun 2016:
• Completion of the sale of Kermia Hotels Ltd and adjacent land for €26,5 mn
March 2013:
• Placed under
Resolution:
– absorption of
Laiki Bank
– bail-in of
uninsured
depositors
• Suspension of
trading on CSE
and ATHEX
Nov 2014:
• Sale of UK loan book2
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Strengthened capital position
c.€8 bn (or c.25%) balance sheet
deleveraging
Improving funding structure
Turnaround has translated into improving financial indicators
(1) Ratio of ELA funding % total assets for 23 September 2016 is based on total assets as at 30 June 2016
(2) Proforma CRD IV, transitional CET1 ratio;
(3) CET1 ratio includes positive impact of €1 bn capital increase; leverage ratio calculated as tangible equity over total assets
(4) Based on EBA Risk Dashboard Report, data as at 31 March 2016
30,3 28,6
26,8 25,4 23,3 22,7
23,5 22,5 22,7 21,5 19,7 19,0
Dec2013
Jun2014
Dec2014
Jun2015
Dec2015
Jun2016
Total assets (€ bn)
RWA (€ bn)
145% 148% 141% 136%
121% 110%
49% 48% 49% 54% 61%
65%
Dec2013
Jun2014
Dec2014
Jun2015
Dec2015
Jun2016
Loan to deposit ratio (L/D)
Customer deposits as % of total assets
ELA funding reduced by €10,1 bn
since peak 90+ DPD formation reversed
Improving asset quality and coverage
0,9 1,3 1,4
2,7
5,3
(0,4)
0,1
(0,0)
(1,3) (2,1)
2009
2010
2011
2012
2013
1H
2014
2H
2014
1H
2015
2H
2015
1H
2016
48,6% 49,8% 53,2% 52,9% 50,1% 44,0%
38,3% 38,7% 40,6% 42,5% 48,1%
52,6%
Dec2013
Jun2014
Dec2014
Jun2015
Dec2015
Jun2016
90+DPD ratio
90+DPD provision coverage
11,4 11,1 9,6
8,8 7,4
5,9 3,8
2,4 1,3
34% 31% 31%
28%
23%
16%
11%
6%
Apr2013
Jun2013
Dec2013
Jun2014
Dec2014
Jun2015
Dec2015
Jun2016
Sep2016
ELA (€ bn)
ELA as % of total assets
1
10,4% 15,1% 13,4% 14,4% 13,1% 13,6%
8,6% 9,4%
12,5% 12,5% 12,6% 13,0%
Dec2013²
Jun2014³
Dec2014
Jun2015
Dec2015
Jun2016
CET1 ratio (fully loaded)
Leverage ratio
Change in 90+ DPD (€ bn)
5
EBA average
L/D4: 122%
2014:
(€0,4 bn)
2015:
(€1,3 bn)
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Significant progress on KPIs with a clear strategy to meet Medium term targets
(1) As of 23 September 2016
(2) IFRS9 impact, which is effective as from 1 January 2018, has not been taken into account for the purpose of the targets. Targets are set on the basis of the present
regulatory environment.
6
Category Key performance
indicators 2013 2014 2015 Jun 2016
Medium
term targets Progress
Capital CET1 ratio (transitional) 10,4% 14,0% 14,0% 14,4% >15% On course
Funding
ELA % assets (€ bn) 31%;
€9,6 bn
28%;
€7,4 bn
16%;
€3,8 bn
6%;
€1,3 bn1
Fully repay
by 2017 On course
Net loans % deposits 145% 141% 121% 110% 100%-120% Achieved
Asset quality
90+ DPD ratio 49% 53% 50% 44% <30% Focus area
90+ DPD coverage 38% 41% 48% 53% >50% Achieved
Provisioning charge2 4,0% 3,6% 4,3% 1,4% <1,0% Stabilising
Margins and
efficiency
Net interest margin 3,5% 3,9% 3,8% 3,6% ~3,00% Stabilising
Fee and commission
income/ total income 14% 13% 15% 15% >20% On course
Cost to income ratio 43% 37% 40% 42% 40%-45% Achieved
Balance
sheet Total assets (€ bn) €30,3 bn €26,8 bn €23,3 bn €22,7 bn >€25 bn
Selective
growth
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Key Investment Highlights
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8
BOC is well positioned to benefit from the Cypriot economic
recovery and make further progress on its strategic roadmap (1/2)
• BOC remains a key pillar for the Cypriot economy given its dominant position
• Clear market leader with total assets of c.€22,7 bn as at 30 June 2016; market share of 41,7% in loans,
29,1% in deposits as at 31 July 2016, 29,0% in life and 12,0% in non-life insurance GWPs3 as at 31 March
2016
• Market share gains in loans and deposits since 2015 indicating return of confidence
Dominant position in the Cypriot
market 2
• Profitability driven by Cypriot operations – targeted lending, strong deposit inflows and revenue diversification
• Strong underlying operating profitability in Cyprus of €128 mn4 in 2Q2016 (Group underlying operating
profitability of €135 mn), expectation of a similar underlying performance in 2H2016, and a provisioning policy
focused on de-risking the balance sheet
• Intention to expand self-funded5 UK operations with a strong executive team Two-pronged
strategy
articulated
around core
Cypriot bank
and problem
loans
reduction
3
Cyprus is the
Bank’s core
engine of growth
a
Expected upside
from
management
and recovery of
problem loans
• Significant reduction in 90+DPDs by €2 bn or 18% in the last two quarters; 90+DPD ratio reduced to 44%
• Slower formation of new 90+DPDs and ramp up in restructuring activity at an average of €1 bn per quarter6
• Loan restructuring in 1H2016 of €2,8 bn with significant restructuring across the whole book; expectation of
further reductions in 90+DPD in the forthcoming quarters
• Shift of focus to Recoveries portfolio, with recoveries via foreclosures and other available tools
• 7 auction events conducted relating to 22 assets; 5 asset sales have been successfully achieved
• Recoveries book was deleveraged by €0,4 bn during 1H2016
• Dedicated Real Estate Management Unit (“REMU”) to drive property sales
b
• Economic recovery exceeding expectations supported by broad based growth and an improved credit outlook
• Real GDP growth in 2Q2016 at 2,7%1 yoy with an average expected growth of 2,5%2 going forward
• Economy recovery underpinned by increased tourism activity, accelerated industrial production, falling
unemployment rate, stabilising fiscal position and internal demand
Cypriot economic recovery 1
(1) Seasonality adjusted
(2) Based on expectations of MOF; CAGR 2017-19
(3) Gross Written Premiums, market share for life insurance and non-life insurance excludes market share for CNP Cyprialife (26%) and CNP Cyprialife & CNP Asfalistiki (14%) in which BoC has 49.9% stake
(4) Profit before provisions and impairments, gains/(losses) on loan derecognition and changes on expected cash flows, restructuring costs and discontinued operations
(5) UK operations are primarily funded via retail deposits
(6) Since 1Q2015
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BOC is well positioned to benefit from the Cypriot economic
recovery and make further progress on its strategic roadmap (2/2)
9
• World-class board with significant international and financial services industry expertise
• Experienced management team with strong local market insight, turnaround experience and a proven track
record of delivering results and normalising fundamentals of the bank
• Good progress on executing against plan to restore profitable growth and deliver adequate medium term risk-
adjusted returns
Clear path to meeting medium
term targets 5
• BOC is considering a premium listing on the LSE in addition to maintaining its existing listing on the CSE;
BOC would not maintain a listing on ATHEX
• A potential London-Cyprus listing is expected to help increase visibility, improve trading liquidity and facilitate
access to a broader investor base
• Listing would be structured to enable eligibility for a potential inclusion in FTSE UK index series; on 26
August 2016, BOC confirmed it is considering incorporating a new holding company in Ireland
Enhanced profile and trading
liquidity via a London-Cyprus
listing3
7
• Significant ELA reduction of €10,1 bn from peak of €11,4 bn in April 2013, enhancing confidence and further
supporting the strategy
• Customer deposits increased by €619 mn in 2Q2016, comprises c.65% of total assets
• Loan to deposit ratio improved to 110%
• Adequate capital position relative to risk profile; CET1 ratio of 14,4% (transitional) and 13,6% (fully loaded)
• Transitional CET1 ratio higher than EU average of 13,4%1
• On a fully loaded basis, compares favourably vs. European peer average of 12,3%
• Conservative leverage ratio2 of 13,0% vs. European peer average of 5,6%
• Plan of action includes selective lending and focus on deposit gathering in Cyprus, aim to fully repay ELA as
soon as possible, NPL management with emphasis on recoveries portfolio and operate a lean business model
• On track to meet medium term targets
(1) Based on EBA Risk Dashboard Report, data as at 31 March 2016
(2) Leverage ratio = Tangible total equity over total assets
(3) Subject to final decisions and regulatory approvals
Board and management aligned
to deliver value for all
stakeholders
Nearly normalised funding profile
with a strong capital position 4
6
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1 Cypriot economic recovery faster than expected…
Real GDP growth (%) Contribution to 2015 GDP growth in percentage points
Source: EIU, credit ratings agencies, CBC, Bloomberg, MOF
Broad-based economic growth gaining momentum… …with tourism and professional services as leading
contributors
…reflected in reduced government bond yields
1,4% 0,3%
(2,4%)
(5,4%)
(2,5%)
1,6% 2,5% 2,5%
(3,4%)
(8,7%)
(3,9%)
2010 2011 2012 2013 2014 2015 2016E 2017E
Real GDP growth - Actual Initial Projections (EC)
Yield (%)
0,00
0,02
0,04
0,06
0,08
0,10
0,12
0,14
0,16
0,18
Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16
Cyprus 2019 (issued Jun 2014) Cyprus 2022 (issued Apr 2015)
Cyprus 2025 (issued Nov 2015) Cyprus 2020 (issued Feb 2010)
10
Aug-16 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16
Cyprus Portgual Italy
Spain Greece Ireland
Baa2
Ba1
Ba3
B2
Caa1
C
A3
B1
Baa2
Ba1
Baa2
Caa3
Moody’s credit ratings
Caa3
Credit ratings improving faster than peers…
A3
Aug-16
0,0 0,2
(0,2)
0,7
0,4
0,1 0,2 0,2
0,0
Ag
riculture
Industr
y
Constr
uctio
n
To
urism
& tra
de
Pro
fessio
nal &
adm
in
Info
rma
tio
n
Fin
ancia
l
Pu
blic
, educatio
n &
health
Oth
er
Total GDP growth 2015: 1,6%
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…on the back of improving macro fundamentals
Acceleration in industrial
production Falling unemployment rate Growth in tourism activity
Tourism revenues
Source: KPMG, PwC, Statistical Service of Republic of Cyprus, CBC, research reports, European Commission, EIU, MOF, BOC economic research
40,6%
37,3%
22,1%
Upper secondary
Less than
Upper secondary
Tertiary
Level of education, age 20-64 (2015)
Cyprus has the highest number of
university graduates per capita in Europe
33,3%
31,4%
29,7%
29,0%
25,0%
21,0%
20,0%
12,5%
12,5%
Corporate tax rate (2016)
Double taxation
avoidance
treaties with
c.50 countries
1,5
1,9 2,1 2,0 2,1
2,3 2,4 8,1%
9,9%
11,5% 11,6% 12,1% 13,2% 13,0%
2009 2012 2013 2014 2015 2016e2017e
€ bn
% of GDP
(5,8%) (4,9%)
(0,2%) (0,6%) (0,4%)
(0,5%)
79%
102% 108% 109% 106%
102%
2012 2013 2014 2015 2016e 2017e
Government budget balance (% of GDP)
Gross public debt (% of GDP)
Government budget and debt
1
11
Stabilising fiscal position
Support from key business enablers
Unemployment rate
11,9%
15,9% 16,1%
15,0%
12,0%
11,5%
2012 2013 2014 2015 2016e 2017e
Recovery in property prices
25%
(7%) (10%)
(2%)
(20%)
(10%)
0%
10%
20%
30%
2008 2010 2012 2014 2016
Residential property price index
(yoy % change by quarter)
1Q2016
(30)
(20)
(10)
0
10
20
30
40
50
Dec 0
8
Dec 0
9
Dec 1
0
Dec 1
1
Dec 1
2
Dec 1
3
Dec 1
4
Dec 1
5
% change yoy by quarter
12 month averages
Growth in industrial production
Geopolitical importance
• Strategic location –
crossroads of EMEA and Asia
• Essential part of the security
dynamic in the Eastern
Mediterranean region
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12%
14%
74%
General Insurance of Cyprus
CNP Cyprialife & CNP Asfalistiki²
Other
A privileged position in the Cypriot market
Dominant franchise in Cyprus
42%
58%
Cyprus gross loans
(Jun 2016):
€50,9 bn
Source: Cyprus Ministry of Finance
(1) Gross Written Premiums
(2) 49,9% owned by BoC
BOC Other
29%
71%
29%
26%
45%
Eurolife
CNP Cyprialife²
Other
Cyprus deposits
(Jun 2016):
€45,9 bn
Cyprus life insurance GWP1
(Mar 2016):
€72 mn
Cyprus non-life insurance GWP1
(Mar 2016):
€117 mn
2
Market share gains since Mar 2015 in both loans and deposits
38,8% 37,7% 38,5% 39,3%
37,9% 40,0% 40,4%
41,4% 41,7%
24,8% 25,3% 25,7% 26,5% 28,2% 28,2% 28,2% 29,0% 29,1%
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Jan 2016 Mar 2016 Jun 2016 Jul 2016
Loans Deposits
New lending to promising sectors (such as working
capital funding to hotels) of €595 mn during first
eight months of 2016 (over €1 bn since Jan 2015)
55%
26%
Deposits in Cyprus increased by €0,62 bn (or 5%)
qoq, and by €1,68 bn (or 14%) yoy as at 30 Jun 2016
12
Cyprus market share evolution
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45%
22%
22%
11%
Corporate SME Retail housing Retail other
Stable NIM in Cypriot operations
573 537 536 527 530 527
386 369 367 366 359 349
139 119 104 100 95 91
1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016
Yield on loans
NIM
Cost of deposits
Refocus towards Cyprus with balance sheet deleveraging and selective lending to
promising sectors
80% 77% 73% 74% 77% 75%
16% 13% 14% 15% 15% 17%
4% 10% 13% 11% 8% 8%
1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016
Improving fee income as a % of revenues
(bps)
Attractive and profitable core Cypriot business 3a
Recovery in profitability
13
11,3 11,6 11,6 12,2 12,7 12,7 13,3
Dec2014
Mar2015
Jun2015
Sep2015
Dec2015
Mar2016
Jun2016
Gross loans by geography (€ bn) Gross loans by customer type (Jun 2016): €19,3 bn Customer deposits in Cyprus (€ bn)
Growing customer deposit base
22,8 19,3
3,9
1,8
Dec 2013 Jun 2016
Cyprus Other
15%
85% 91%
9%
26,7
21,1
Net interest income
Fee and commission income
Other income
% of total income
(219)
111
(252)
127 104
2013 2014 2015 1H2015 1H2016
Net income for Cyprus operations (€ mn)
Elevated provisions of
€593 mn for 4Q‟15
due to assumption
changes in relation to
ECB regulation
Similar performance
expected in 2H2016,
with provisioning
focused on de-risking
the balance sheet
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Gross loans and customer deposits Loans by sector as at 30 June 2016
0,63 0,67
0,74 0,78
0,83 0,88
0,93
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Intention to expand the UK operations
78%
19%
2% 1%
Corporate
SMEs
Consumer credit
Housing
3a
• BoC UK operates a branch in North London and business centres in Central London, South London and Birmingham
• Target customer segments include entrepreneurs and owner-managed businesses; primarily funded by retail deposits
• Core competence in professional buy-to-let property market – 75% of the lending portfolio with an average LTV of 55% and concentrated in
London and South East England
• Expansion strategy includes adding a consumer division (mortgages, savings and current accounts) and business division (trade related
products for professionals, SMEs and Cypriot residents)
• New CEO appointed in December 2015 to lead the UK bank - previously with Westpac, Western Australia, (General Manager for Retail and
Business) and with Bank of Ireland UK (Post office J.V.)
14
0,96 0,92 0,93
1,00 1,04
1,08 1,13
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Gross loans (£ bn)
Customer deposits (£ bn)
2,2
3,3
1H2015 1H2016
Profitability
Operating profit (£ mn) Profit before tax (£ mn)
1,8
3,6
1H2015 1H2016
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15 (1) Information for 1Q2013 and 2Q2013 is not available as it has not been possible to publish the financial results for the three months ended 31 March 2013
2015 was a transition year in the evolution of 90+DPDs with a more consistent reduction in 2016
0,3 0,4 0,3
(0,1)
0,3 0,4
0,6
0,1 0,2 0,2
0,4
0,6
0,1 0,1
1,3 1,2
3,3
2,0
0,0
(0,2) (0,2)
0,4
(0,3)
0,1
(0,1)
(0,6) (0,7)
(1,0) (1,0)
1Q
200
9
2Q
200
9
3Q
200
9
4Q
200
9
1Q
201
0
2Q
201
0
3Q
201
0
4Q
201
0
1Q
201
1
2Q
201
1
3Q
201
1
4Q
201
1
1Q
201
2
2Q
201
2
3Q
201
2
4Q
201
2
1H
201
3¹
3Q
201
3
4Q
201
3
1Q
201
4
2Q
201
4
3Q
201
4
4Q
201
4
1Q
201
5
2Q
201
5
3Q
201
5
4Q
201
5
1Q
201
6
2Q
201
6
2009: €945 mn 2010: €1.329 mn 2011: €1.399 mn 2012: €2.723 mn 2013: €5.311 mn 2014: (€350 mn) 2015: (€1.324 mn)
Slow deterioration Economic crisis Stabilisation Recovery
3b Asset quality – 90+DPD formation mirrors economic cycle with
recovery gaining momentum
Quarterly change of 90+DPD (€ bn)
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Bulk of the 90+DPD stock is managed by the RRD unit of the Bank
(1) 90+DPD: defined as loans past-due for more than 90 days and those that are impaired (impaired loans are those which are not considered fully collectable and for which a provision for
impairment has been recognised on an individual basis or for which incurred losses exist at their initial recognition or customers in Debt Recovery)
(2) Non-performing exposures as per the EBA definition
(3) Restructured loans and performing but still on probation period
(4) Includes €0,2 bn of loans with contagion effect
(5) Subject to no redefault
(6) Other countries: Russia, Romania and Greece
16
3b
Gross loans breakdown by asset quality (€ bn) 90+DPD and NPE split in Cyprus
• BOC Group gross loans of €21,1 bn as at 30 June 2016, of which €19,3 bn in Cyprus (accounting for over 90% of Group loans)
• 90+DPD1 of €8,7 bn and 90+DPD ratio of 44,9% in Cyprus as at 30 June 2016 (BOC Group 90+DPD of €9,3bn and 90+DPD ratio of 44,0%)
• NPEs2 in Cyprus totalled €11,9 bn as at 30 June 2016 (BOC Group NPEs of €12,5 bn)
NPEs with forbearance measures, no impairments and no arrears were at €2,4 bn3,4; c.85% of these are expected to exit the NPE classification by the end of 20175
Cyprus 19,3
Other 1,8
21,1
BOC Group gross loans(Jun 2016)
90+DPD 8,7
2,4
0,6 0,2
Performing restructured +
exited 1,9
Performing 5,5
19,3
Cyprus gross loans(Jun 2016)
NPEs with
forbearance measure
no impairments and
no arrears3,4
NPEs with
forbearance
measure no
impairments
and with
arrears < 90+
DPD7
Contagion effect
but not restructured
(7) Restructured and performing but still on probation period with arrears <90+ DPD
(8) Performance of loans restructured during 2Q2016 is not presented as it is too early to assess it
(9) Weighted average performance of quarterly restructured loans between 1Q2014 and 1Q2016
Performance of restructured loans (Cyprus)
Total NPEs: €11,9 bn
• On average, 79% of the loans restructured
post 31 December 20138 for Cyprus
operations have no arrears
• Driven by corporate restructured loans of
which 92%9 are in the “no arrears” bucket
6
• RRD manages c.€7,5 bn of
90+DPDs
- o/w c.€5 bn is managed
via RRD recoveries
79%
9%
2%
2% 8%
No arrears 1-30 dpd 31-60 dpd
61-90 dpd Over 90 dpd
Performance of loans restructured since 1Q20148,9
57% 29%
14%
90+DPD (Jun 2016): €8,7 bn
42%
35%
23%
NPE (Jun 2016): €11,9 bn
Recoveries RRD excluding Recoveries Non RRD / Recoveries
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Strong track record of reduction in 90+DPDs…
17
3b
18% drop in 90+DPD in 1H2016 to €9,3 bn, c.€2 bn of reduction achieved
12,7 12,8 12,7 12,0 11,3 10,3 9,3
53,2% 53,1% 52,9% 52,5%
50,1%
47,1%
44,0%
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
90+DPD (€ bn) 90+DPD ratio
(€2 bn) / (18%)
39%
27%
14%
8%
5% 7%
Trade, manufacturing & construction
Private individuals
Real estate
Professional services
Hotels & catering
Other sectors
90+DPD by economic activity (Jun 2016): €9,3 bn
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
…driven by slower formation of new problem loans and ramp up in
restructuring activity
Quarterly evolution of new problem loan inflows
0,68
0,60
0,34 0,36
0,22
0,11 0,13 0,14
3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016
18
3b
Quarterly evolution of restructured loans
Median: 0,28
• Slower formation of new problem loans (90+DPD) across business segments
• c.82% of overall 90+DPD reduction for 2Q2016 relates to corporate loans
• €2,76 bn of restructurings in 1H2016
• Restructuring of corporate loans accounted for 59% of total 2Q2016
restructurings
• As at 2Q2016, 79% of loans restructured post 2013 for Cyprus operations
have no arrears
0,44
0,69
0,56
0,73
1,35
1,50
1,26
4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016
Median: 0,73
90+DPD inflows in Cyprus operations (€ bn) Restructurings per quarter (€ bn)
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Legislative reforms helping in a number of important areas…
Laws
• Insolvency framework enacted in May 2015
• Foreclosure law enacted in Sept 2014, in force in Aug 2015, 1st auctions completed in Jun 2016
• Sale of loans bill available
• Securitisation law expected to be passed in 4Q2016/1Q2017
Tax incentives
• Tax incentives for customers who agree to consensual solutions
• Tax incentives include exemption from CGT1 and transfer fees in sale of property to the Bank
Other reforms
• Introduction of Examinership provides creditor „cram down‟ mechanism for the first time
• Regulation of insolvency practitioners introduced in 4Q2015
• Ongoing passport scheme for international investors driving cash collections from property developers
The toolkit to support
debt restructuring is
now largely in place…
…delivering a number
of important benefits
for the Bank
Incentivises faster
consensual solutions
Reduced time to
execute non
consensual solution
Reduces cost of
restructurings
Provides greater
options to deleverage
Supports and
incentivises faster
cash collection
Improved quality and
regulation of
insolvency
practitioners
(1) Capital Gains Tax
19
3b
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
20
…resulting in increased reduction of Cypriot 90+DPD stock in 1H2016 3b
90+DPD evolution by movement of stock of loans and solutions applied (Cyprus)
11,5
10,6 10,6
8,7
0,2 (0.9 )
(0.1 ) (0.0) 0,3 (1.0 )
(0.6)
(0.6)
Jun 2015 Inflows Restructurings /Collections
Write-offs Consensualforeclosures
Dec 2015 Inflows Restructurings /Collections
Write-offs Consensualforeclosures
Jun 2016
Net reduction: c.€0,9 bn Net reduction: c.€2,0 bn
€ bn
Reduction in 1H2016 involved application of more difficult solutions, as focus shifts towards tackling the recoveries portfolio
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114 RRD
(Excluding recoveries) Major corporate Corporate SME
Business unit
summary
• Large diversified groups
• 23 connections
• >€100 mn debt
• Mid market businesses
• c.170 connections
• €6 - €100 mn debt
• Small OMBs1
• c.1.900 connections
• <€6 mn debt
Key metrics evolution
(€ bn)
Management actions
• c.70 experienced restructuring officers
• Portfolios assigned based on size/complexity
• Sustainable solutions: debt:equity & debt:asset swaps; re-tranching, including
“equity like‟ PIK; mezzanine financing
• Support from internationally experienced restructuring specialists and external
lawyers (UK & CY) used extensively
• Improvements to lending documents, security, step in rights, monitoring &
covenants
• 8 specialist geographically spread BU‟s
• New team added in 1Q2016 to drive
pace
• Portfolio analysis with targeted
campaigns
• Product range enhanced e.g. split &
freeze in addition to rescheduling of
payments
• Close monitoring & clearing of early
arrears
Progress
• €350 mn of portfolio transferred back to Corporate line
• Active negotiations ongoing with all major borrowers
• Good prospects to conclude and execute deals
• New team and approach delivering
results, with pace improved qoq
• Underlying economic improvements
supportive
Gross loans 90+DPD
1,4 1,3 1,3 1,0 0,9 0,8
Dec2015
Mar2016
Jun2016
Dec2015
Mar2016
Jun2016
Focus on sustainable NPL solutions across RRD
21
3b
Bespoke tactical plans in place for each segment within RRD
(1) Owned Medium Businesses
2,9 2,8 2,5 2,0 1,7
1,3
Dec2015
Mar2016
Jun2016
Dec2015
Mar2016
Jun2016
Gross loans 90+DPD
1,8 1,6 1,4 1,0
0,6 0,4
Dec2015
Mar2016
Jun2016
Dec2015
Mar2016
Jun2016
Gross loans 90+DPD
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Progress on top 20 group exposures
(1) Total exposures include on balance sheet and off balance sheet items
(2) Percentage points 22
3b
Top 20 exposures down by €1 bn since 30 Sep 2014
2,8 2,7 2,7 2,7 2,6 2,3 1,9 1,4
1,6 1,5 1,3 1,3 1,1 1,5
1,6 2,0
4,4 4,2
4,0 4,0 3,7 3,8
3,5 3,4
64% 64% 66% 67% 69%
61%
53%
42%
Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
90+DPD Loans other than 90+DPD 90+DPD ratio over total exposure
1,4
0,8
1,2
Jun 2016
Top 20 - total exposure split (€ bn)
3,41
90+DPD
NPEs with forbearance
measures, no
impairments, no
arrears
Performing
NPE
€2,2 bn
• Top 20 group exposures totalled €3,4 bn as at 30 Jun 2016 vs. €4,4 bn as at 30 Sep 2014
• 90+ DPD ratio reduced by 11 p.p2 to 42% during 2Q2016
• Taking into account the provisions and tangible collateral, top 20 exposures are fully covered
- Total coverage (Provisions and MV of collateral over total exposure) of 103% as at 30 Jun 2016
• As at 30 Jun 2016, c.64% of the top 20 group exposures were restructured
90+DPD reduced by 47%
€ bn1
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
RRD – recoveries
Customers • Corporate: c.250 connections • SME: 4.000 customers • Retail: 21.000 customers
Key metrics
evolution
Management
actions
• Specialised units have been set up/enhanced – i.e. receivership and foreclosure teams
• Additional skills/experience transferred internally from other teams
• Support from international specialists from 4Q2015
• Increased focus on faster consensual deals (e.g. debt: asset swaps)
• Step up aggressive actions for non co-operative borrowers, ramping up the pace in dealing with old unworkable portfolio
Progress
• Refreshed approach in corporate delivering results contributing to NPE reduction
• Retail/ SME showing slower but improving progress, next quarters important in keeping momentum
• Foreclosure actions important to building and maintaining pace
0,2
0,4
Inflows to recoveries Deleverage
Enhanced focus on unlocking the Recoveries portfolio
23
3b
Key developments / action points from the private auction process
• Commencement of private foreclosures in late June 2016
• 7 auction events conducted relating to 22 assets
• First successful asset sales have been achieved (5 assets sold in total)
• Foreclosure Task Force is up and running, aiming to boost foreclosure volumes
• Servicing either completed or in progress for over 300 assets from the private auction process
• 17 additional auction venues planned
2,4 2,2 2,1
1,5 1,5 1,5
0,8 0,8 0,8 0,6 0,7 0,7
Dec 2015 Mar 2016 Jun 2016
Rec-retail housing
Rec-retail other
Rec-SMEs
Rec-corporates
5.3 5.2 5.1 Gross loans (€ bn)
Signals intent to use foreclosure tool as
an additional tool to the armoury used to
unlock solutions with problematic cases
and non cooperative borrowers
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Cyprus: €929 mn
Real estate sales gathering momentum via REMU
24
(1) Includes Kermia Hotels Limited where disposal completed in June 2016
(2) Total Stock as at 30 June 2016 excludes investment properties and investment properties held for sale
(3) Includes manufacturing, industrial and under construction
(4) Relates to Greece and Romania
(5) Number of properties shown for Cyprus only
3b
• Real Estate Management Unit (REMU) was set up in Jan 2016 to drive on-boarding and sales momentum
• Dedicated web platform to market on-boarded assets and provide information online to prospective buyers (www.remuproperties.com)
• Manages over €1,1 bn worth of properties (carrying value)
• During 1H2016, €689 mn of assets were on-boarded in Cyprus
• €92 mn of assets were disposed in Cyprus, mainly relating to hotels
• Post 30 June 2016, 5 sales & purchase agreements are in progress with total consideration of c.€45 mn
BoC Group - property stock movement (€ mn)
542
1.130
691
(94) (9)
Stock as at01 Jan 16¹
Additions Sales¹ Impairmentloss
Stock as at30 Jun 16²
Property stock analysis (30 June 2016)
82,2%
14,5%
3,3%
Cyprus Greece Others
Group: €1,1 bn
31,4%
8,7%
22,1%
32,5%
5,2%
0,1% Nicosia
Larnaca
Limassol
Paphos
Famagusta
Other
On-boarded property stock split (carrying value, € mn)
581 208 68 72 201 1.130 Jun2016
Land & plots Commercial buildings³ Residential buildings Hotels Other⁴
Cyprus: €929 mn
844 125 149 6
Number of properties5
1.1245
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Reduction in NPEs for a fifth consecutive quarter
25
3b
(1) Curing period of the NPEs with forbearance measures, but no impairments and no arrears, assuming no re-default
(2) Restructured loans and performing but still on probation period
15,0 15,2 14,8 14,2 14,0 13,3 12,5
62,9% 63,0% 61,9% 62,2% 61,8%
61,0% 59,3%
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
NPEs NPE ratio
NPEs reduced by €1,47 bn (or 11%) in 1H2016
€ bn
2.4
Forborne NPEs with no impairments or
arrears (€ bn) – expected to exit NPEs by
year1
0,8
1,3
0,3
2016 2017 2018 +
• NPEs reduced by €0,8 bn during 2Q2016 and totalled to €12,5 bn as at 30 Jun 2016
• NPEs with forbearance measures, no impairments and no arrears totalled €2,4 bn as at 30 Jun 2016
- c.85% is expected to exit the NPE classification by the end 2017, subject to no re-default
2.2 1.9
1.5 1.3
(€1,5 bn) / (11%)
NPE
coverage 34% 35% 36% 35% 39% 38% 39%
NPE coverage ratio of 48% after excluding
forborne NPEs with no impairments or
arrears of €2,4 bn
NPEs with forbearance measures, no impairments, no arrears2
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
COR
Conservative provisioning policy leading to improving coverage levels
26
3b
(1) Percentage points
(2) Provisions for impairment of customer loans and gains/(losses) on derecognition of loans and changes in expected cash flows
219 110 123 96 630 62 96
41,6% 41,9% 42,5% 41,1%
48,1% 49,3% 52,6%
4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016
Quarterly provisions impairment² 90+DPD coverage ratio
90+DPD coverage ratio improvement of 12p.p1 driven by over €1,3 bn additional cumulative provisions since 4Q2014
Accumulated provisions at 23,1% of gross loans and stabilising cost of risk
5,1 5,4 5,4 4,9 5,4 5,1 4,9
21,6%
22,2% 22,5%
21,6%
24,1%
23,2% 23,1%
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Accumulated provisions Provisions % of gross loans
€ mn
€ bn
3,6% 2,1% 2,2% 2,1% 4,3% 1,1% 1,4%
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Significant reduction in ELA achieved with plans to fully repay as
soon as possible
27
4
(1) Ratio of ELA funding as a % of total assets for 23 September 2016 is based on total assets as at 30 June 2016
Over €10 bn reduction in ELA achieved since peak, with €2,5 bn reduction during 2016…
11,4 11,1
9,9 9,6 9,5 8,8
7,7 7,4 6,9
5,9
4,9
3,8 3,3
2,4
1,3
Apr2013
Jun2013
Sep2013
Dec2013
Mar2014
Jun2014
Sep2014
Dec2014
Mar2015
Jun2015
Sep2015
Dec2015
Mar2016
Jun2016
Sep2016
€ bn
Plans to fully eliminate ELA
• Deposit Growth
• Wholesale and interbank market access
• Retention of cash profits from operations
• Proceeds from deleveraging
• Increase loan pool for the Additional
Credit Claim ECB framework
1
…reflected in an improving funding profile with continuous reduction in ELA to total assets since March 2014 and
increased share of customer deposits
€2,5 bn
51% 49% 49% 48% 48% 49% 49% 51%
54% 56% 61% 62%
65%
34% 31% 31% 32% 31%
28% 28% 26%
23% 20%
16% 15%
11% 6%
Jun 2013 Sep 2013 Dec 2013 Mar 2014 Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016 Sep 2016
Deposits as a % of total assets ELA as a % of total assets
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
148% 141% 138% 136% 132% 121% 119% 110%
124% 125% 125% 123% 121% 122%
Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Loans to deposits EU average Loans to deposits ratio
Growing deposit base in core Cypriot franchise resulting in an
improving liquidity profile and deposit market share gains
28
4
(1) Other countries comprise Russia (until June 15) and Romania
(2) Based on EBA Risk Dashboard Report, data as at 31 March 2016
Over c.10% average growth in Cypriot deposit base with sequential improvement in loans to deposits ratio
11,2 11,3 11,6 11,6 12,2 12,7 12,7 13,3
1,3 1,3 1,4 1,4 1,4 1,5 1,4 1,4
0,8 0,55 0,61 0,61 0,01 0,01 13,3 13,2 13,6 13,6 13,6
14,2 14,1 14,8
Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Cyprus UK Other
Customer deposits (€ bn) Loans to deposits ratio
Dominant position across segments with increasing market share in resident and non-resident deposits
1 2
37,2%
28,9% 27,6%
18,1%
29,1%
Corporates(Non financialcorporations)
Households GeneralGovernment
Other finanicalcorporations
Total marketshare
Deposit market share by segment (30 Jun 2016)
25,6% 25,5% 24,6% 24,3%
23,7% 24,1% 24,6% 25,3%
26,1% 27,0% 26,5%
27,2% 27,4%
35,2%
32,2%
30,8%
28,4% 27,5%
26,7% 26,9% 26,7% 27,5%
31,1%
32,9% 34,1% 34,0%
Sep2013
Dec2013
Mar2014
Jun2014
Sep2014
Dec2014
Mar2015
Jun2015
Sep2015
Dec2015
Mar2016
Jun2016
Jul2016
Residents Non-residents
Deposit market share in Cyprus
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Adequately capitalised relative to risk profile, positioning BOC
favourably to focus on growing in Cyprus
29
4
Source: Company filings
(1) Based on EBA Risk Dashboard Report, Data as at 31 March 2016
(2) Excluding DTC
(3) Excluding CoCos
(4) Minimum Requirement for Own Funds and Eligible Liabilities; precise calibration and ultimate designation of the Bank‟s MREL liabilities have not yet been finalised
14,0% 13,9%
14,9% 15,6%
14,0% 14,3% 14,4%
12,5% 12,4% 12,8% 13,0%
13,6% 13,4%
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
CET1 ratio (transitional) Average EU CET1 ratio (transitional)¹
CET1 ratio (transitional) of 14,4% compares favourably vs. EU average of 13,4%...
13.4% 13.4% 14.4% 15.1% 13.1% 13.5% 13.6%
CET1 ratio (fully loaded)
…and also on a fully loaded2,3 basis vs. European peers
16,2
%
16,2
%
16,2
%
14
,9%
14,5
%
13,7
%
13,6
%
13,5
%
13,5
%
13,0
%
12,9
%
12,9
%
12,7
%
12
,4%
12,2
%
12
,1%
11,8
%
11,8
%
11,6
%
11,5
%
11,5
%
11,2
%
11,1
%
11,1
%
11,0
%
10,8
%
10,7
%
10,7
%
10,5
%
10,4
%
10,1
%
9,6
%
Pe
er
1
Pe
er
2
Pe
er
3
Pe
er
4
Pe
er
5
Pe
er
6
Bo
C
Pe
er
7
Pe
er
8
Pe
er
9
Pe
er
10
Pe
er
11
Pe
er
12
Pe
er
13
Pe
er
14
Pe
er
15
Pe
er
16
Pe
er
17
Pe
er
18
Pe
er
19
Pe
er
20
Pe
er
21
Pe
er
22
Pe
er
23
Pe
er
24
Pe
er
25
Pe
er
26
Pe
er
27
Pe
er
28
Pe
er
29
Pe
er
30
Pe
er
31
Average (ex. BoC): 12.3%
Fully loaded CET1 ratio (2Q2016)
On the back of evolving capital requirements such as MREL4, BoC continues to consider funding options such as senior debt and/or subordinated
capital in anticipation of such upcoming requirements
2
3
Conservative leverage ratio of 13.0% (2Q2016) vs.
European peers average of 5.6%
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
(1) As of 23 September 2016
(2) IFRS9 impact, which is effective as from 1 January 2018, has not been taken into account for the purpose of the targets. Targets are set on the basis of the present regulatory environment
Clear path to meeting medium term targets 5
Category KPIs 2015 1H2016 Medium term
targets
Capital CET1 ratio (transitional) 14,0% 14,4% >15%
Funding
ELA % of assets; € bn 16%; €3,8 bn 6%; €1,3 bn1 Fully repay
by 2017
Net loans % of deposits 121% 110% 100%-120%
Asset quality
90+ DPD ratio 50% 44% <30%
90+ DPD coverage 48% 53% >50%
Provisioning charge2 4,3% 1,4% <1,0%
Margins and
efficiency
NIMs 3,8% 3,6% ~3,00%
Fee income/ total income 15% 15% >20%
Cost / income 40% 42% 40%-45%
Balance sheet Total assets (€ bn) €23,3 bn €22,7 bn >€25 bn
30
Key pillars & plan of action
• Sustain momentum in restructuring
• Focus on recoveries portfolio - foreclosures
• Real estate management via REMU
1. Reduce
problem
loans
• Eliminate ELA
• Boost deposit franchise
• Access debt capital markets
• Access wholesale and interbank market
• Increase loan pool for the Additional Credit
Claim ECB framework
• Retention of cash profits from operations
2. Normalise
funding
structure
• Targeted lending in Cyprus into promising
sectors to fund recovery
• New loan origination, while maintaining
lending yields
• Revenue diversification via fee income from
international business, wealth, and insurance
• Expand UK franchise by leveraging the UK
subsidiary
3. Focus on
core
business
• Tangible savings through a targeted
reduction program
• Introduce technology/processes to enhance
distribution channels and reduce costs
• HR policies aimed at enhancing productivity
4. Lean
operating
model
• Deliver appropriate medium-term risk-
adjusted returns
5. Deliver
returns
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114 Current shareholding of BOC (Jun 2016) Current Board composition
9,9%
9,6%
5,2%
5,0%
1,6% 55,9%
12,8%
Lamesa Holding S.A. (an affiliate of Renova Group)
Cyprus Popular Bank Public Co Ltd
TD Asset Management S.A.
EBRD
WL Ross
Other: Institutional investors and legal persons
Other: Individuals
Name Designation
Dr. Josef Ackermann Chairman
Independent
Mr. Wilbur Ross Vice Chairman
Independent
Mr. Maksim Goldman Vice Chairman
Non Executive
Mr. John Patrick Hourican CEO
Executive
Dr. Christodoulos Patsalides Deputy CEO and COO
Executive
Mr. Arne Berggren Board member
Independent
Mr. Marios Kalochoritis Board member
Independent
Mr. Michalis Spanos Board member
Senior Independent
Mr. Ioannis Zographakis Board member
Independent
Mr. Michael Heger Board member
Independent
Ms Lyn Grobler Board member1
Independent
Share capital increase in 2014 attracted reputed international
investors and a world class Board 6
31 (1) Subject to ECB approval
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Rationale for considering a listing on the LSE
32
7
Low levels of liquidity of c.€0.2 mn ADTV
Low levels of research coverage – only covered by HSBC
No index inclusion
Athens listing no longer suitable given lack of Greek banking
operations
Greater visibility for the Bank and the Cypriot economy
Expanded shareholder base
Potential inclusion in FTSE UK index series
Clean structure with highest standards of corporate
governance
Decoupling from Greece
Current listing New listing
CSE ATHEX CSE LSE
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Macro and
geo-political factors
• Slower economic recovery or regress into recession
• Failure of Government to cover funding needs post the end
of the ESM / IMF financing Programme (March 2016)
Asset quality • Credit risk concentration – esp. large corporate exposures
• High concentration of collaterals in real estate
• Success in restructuring/addressing large problematic
exposures
• Debt for asset swaps, debt for equity swaps, sale of loans
• Focus on Recoveries portfolio
Funding
External challenges – limited influence
• Further deterioration of the Russian economy
• Brexit impact, particularly on tourism industry (weaker GBP)
• Proposed tax reform in other jurisdictions (e.g. Russia de-
offshorisation)
Internal challenges – able to mitigate Mitigants
• Continued reliance on Eurosystem funding
• Changes in existing and upcoming of new regulatory
requirements eg. „MREL‟1
• Deposits stabilising with launch of active deposit retention/gathering programme
• ELA funding being reduced fast
• Availability of significant amount of ELA eligible assets in case of need
• Gradual return to wholesale funding markets
• Consideration of various funding opportunities (including both senior debt and/or subordinated capital instruments) in anticipation of upcoming new regulatory requirements
Litigation • Pending legal claims including CySEC2 investigations and
bail-in related litigations among others
• Appropriate provisions have been made in respect of
pending legal proceedings
• Diversification of business model away from Russia / Ukraine
geographies
• Gradual increase in tourist arrivals from other destinations
Mitigants
• Stronger Bank is better able to stimulate the economy
• Economic uncertainty in Greece and potential impact to the
periphery • Minimum direct exposure in Greece
Main challenges
(1) Minimum Requirement for Own Funds and Eligible Liabilities.
(2) Cyprus Securities and Exchange Commission 33
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Appendices
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Appendix I
BOC Group financial overview
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Income statement review
36
€ mn 1H2016
1H2015
represented1 yoy +% FY2015 FY20142 FY2013 CAGR 13-15
Net interest income 360 439 -18% 842 969 880 -2%
Fees and commission income 74 79 -7% 154 152 140 5%
Insurance income net of insurance claims 25 20 22% 48 46 65 -14%
Core income 459 538 -15% 1.044 1.167 1.085 -2%
Other income 23 (3) - (4) 1 (66) -75%
Total income 482 535 -10% 1.040 1.168 1.019 1%
Total expenses (202) (194) 4% (416) (427) (435) -2%
Profit before provisions and impairments3 280 341 -18% 624 741 584 3%
Provisions for impairment of customer loans net of gains on derecognition of
loans and changes in expected cash flows (158) (234) -33% (959) (770) (914) 2%
Impairments of other financial and non financial assets (22) (31) -31% (62) (90) (23) 64%
Share of profit from associates 2 3 -53% 6 5 (5) n.m
Profit/(loss) before tax, restructuring costs and discontinued operations 102 79 29% (391) (114) (358) 5%
Tax (12) (10) 17% (9) (11) (2) 112%
(Loss)/profit attributable to non-controlling interests (6) 1 - 6 19 1 145%
Profit/(loss) after tax from continuing operations4 84 70 20% (394) (106) (359) 5%
Advisory, VEP and other restructuring costs5 (87) (22) 302% (43) (36) (157) -48%
Loss from disposal group held for sale/discontinued operations - (29) -100% (38) (166) (174) -53%
Net gain on disposal of non-core assets 59 41 45% 37 47 (1.366) n.m
Profit/(loss) after tax 56 60 -6% (438) (261) (2.056) -54%
Net interest margin 3,59% 3,88% -29 bps 3,79% 3,94% 3,45% n.m
Cost-to-Income ratio 42% 36% +6 p.p 40% 37% 43% n.m
1. See Note 2.32 to the Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2016, Comparative information.
2. The FY2015 is not comparable to the FY2014 given the significant deleveraging completed since then, including, among others, the partial repayment of the sovereign bond
held by the Bank, by the Republic of Cyprus on 1 July 2014, and the disposal of the majority of the Russian operations during 3Q2015.
3. Profit before provisions and impairments, gains/(losses) on derecognition and changes on expected cash flows, restructuring costs and discontinued operations.
4. Profit/(loss) after tax and before restructuring costs, discontinued operations and net profit on disposal of non-core assets
5. Advisory, VEP and other restructuring costs comprise mainly: 1) fees of external advisors in relation to: (i) disposal of operations (ii) customer loan restructuring activities which
are not part of the effective interest rate and (iii) the contemplated listing on the London Stock Exchange, and 2) voluntary exit plan costs.
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Balance sheet review
Note: As from 4Q2014, the Group‟s operations in Russia are treated as disposal group held for sale and results have been presented accordingly as discontinued operations
according to IFRS 5. In September 2015, the Bank completed the sale of the majority of its Russian operations. The part of the operations not disposed of, has ceased to be
classified as held for sale and its results are presented as part of the continuing operations. 37
Assets (€ mn) Jun 2016 2015 2014 2013 CAGR
2013 – Jun 16
Cash and balances with Central Banks 1.519 1.423 1.139 1.240 8%
Loans and advances to banks 1.174 1.314 1.647 1.290 -4%
Debt securities, treasury bills and equity investments 840 1.009 2.541 3.433 -43%
Net loans and advances to customers 16.253 17.192 18.168 21.764 -11%
Other assets 2.883 2.284 2.378 2.622 4%
Non current assets and disposal groups classified as held for sale 11 49 916 - n.a.
Total assets 22.680 23.271 26.789 30.349 -11%
Liabilities and equity (€ mn) Jun 2016 2015 2014 2013 CAGR
2013 – Jun 16
Deposits by banks 343 242 162 196 25%
Funding from central banks 3.101 4.453 8.284 10.956 -40%
Repurchase agreements 398 368 580 594 -15%
Customer deposits 14.746 14.181 12.624 14.971 -1%
Debt securities in issue 0 1 1 2 -100%
Other liabilities 996 944 1.046 888 5%
Subordinated loan stock - - - 5 -100%
Non current liabilities and disposal groups classified as held for sale 0 4 611 - n.a.
Total liabilities 19.584 20.193 23.308 27.612 -13%
Share capital 892 892 892 4.743 -49%
Capital reduction reserve and share premium 2.505 2.505 2.505 - n.a.
Revaluation and other reserves 240 259 147 72 62%
Accumulated losses (583) (601) (79) (2.152) -41%
Shareholders’ equity 3.054 3.055 3.465 2.663 6%
Non controlling interests 42 23 16 74 -20%
Total equity 3.096 3.078 3.481 2.737 5%
Total liabilities and equity 22.680 23.271 26.789 30.349 -11%
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Main performance indicators
Ratios 1H2016
Performance
ROAA (annualised) 0,5%
ROTE (annualised) 3,8%
Net Interest Margin 3,59%
Cost to income ratio 42%
Loans to deposits 110%
Asset Quality
90+ DPD / 90+ DPD ratio €9.269 mn (44%)
90+ DPD coverage 52,6%
Cost of risk (annualised) 1,4%1
Provisions / Gross Loans 23,1%
Capital
Transitional Common Equity Tier 1 capital €2.735 mn
CET1 ratio (transitional basis) 14,4%
Total Shareholders‟ Equity / Total Assets 13,5%
(1) Provisions for impairment of customer loans and gains/(losses) on derecognition of loans and changes in expected cash flows
0,388 0,392 0,393 0,394 0,342 0,348 0,342
0,374 0,378 0,379 0,380
0,327 0,332 0,327
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Book Value per share (€) Tangible Book Value per share (€)
Book value evolution
38
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Gross loans by geography
22,02 21,72 21,20 21,32 21,19 20,98 20,66 19,98 19,27
1,17 1,11 0,91 1,03 1,13 1,14 1,21 1,17 1,18
2,10 1,91 1,66 1,74 1,61 0,75 0,72 0,70 0,63
Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Cyprus UK Other countries¹
25,30 24,74 23,77 24,09
Gross loans by geography and by customer type
23,93 22,86 22,59
Gross loans by customer type
30 June 2016 (%)
91,4%
5,6% 3,0% Cyprus
UK
Othercountries¹
48,0%
21,6%
20,3%
10,1% Corporate
SME
Retailhousing
Retailother
30 June 2016 (%)
(1) Other countries: Russia, Greece and Romania
(€ bn)
(€ bn)
Total
Total
12,61 12,17 11,83 12,10 12,03 11,56 11,42 10,77 10,13
5,50 5,54 5,09 5,02 4,99 4,75 4,68 4,65 4,55
4,67 4,61 4,41 4,43 4,39 4,35 4,31 4,28 4,27
2,52 2,42 2,44 2,54 2,52 2,20 2,18 2,16 2,13
Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Corporate SMEs Retail housing Retail other
25,30 24,74 23,77 24,09 23,93 22,86 22,59
39
21,85 21,08
21,85 21,08
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Deposits by geography
9,67 8,66 8,20 8,09 7,79 7,85 8,07 8,42 8,76 8,94 9,01 9,40
4,75 4,05 3,79 3,59 3,46 3,47 3,57 3,21 3,40 3,75 3,68 3,91
1,30
1,24 1,25 1,25 1,29 1,30 1,36 1,39 1,45 1,49 1,43 1,43
1,25
1,02 0,83 0,87 0,79 0,55 0,61 0,61
0,01 0,01
Jun 2013 Dec 2013 Mar 2014 Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Cyprus non-IBU Cyprus IBU¹ UK Other countries²
16,97 14,97 14,07 13,80 13,33 13,17
Analysis of deposits by geography and by type
13,61 13,63 13,61 14,18
Deposits by type
12,72 10,55 9,59 9,13 8,53 7,88 8,16 8,14 7,97 8,16 8,15 8,31
0,83
0,93 0,95 0,95
0,84 0,96 0,97 1,02 1,01 1,03 1,01 1,04
3,42
3,49 3,53 3,72 3,96 4,33 4,48 4,47 4,63 4,99 4,97 5,40
Jun 2013 Dec 2013 Mar 2014 Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Time deposits Savings accounts Current & demand accounts
16,97 14,97 14,07 13,80 13,33 13,17 13,61 13,63 13,61 14,18
30 June 2016 (%)
63,7%
26,5%
9,7%
0,1%
Cyprus – non IBU
Cyprus – IBU¹
UK
Othercountries
56,4%
7,0%
36,6%
Timedeposits
Savingsaccount
Currentanddemandaccount
30 June 2016 (%)
Total Cyprus 90%
(1) IBU - Division servicing exclusively international activity companies registered in Cyprus and abroad and non-residents
(2) Other countries: Russia, Greece, Romania and Ukraine (until March 2014)
(€ bn)
(€ bn)
Total
Total
40
14,13 14,75
2
14,13 14,75
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
CET1 and shareholders’ equity walk since 2015
CET1 ratio evolution
14,0% 1,4% 0,4% 14,4% 13,6%
(0,7%) (0,7%) (0,8%)
CET1 ratio 2015(transitional)
Profit beforeprovisions
Provisions¹(post-tax)
RWA change DTA and otherequity movements
CET1 ratio Jun2016 (transitional)
Adjustments to FL² CET1 ratio Jun2016 (fully loaded)
(1) Net of gains on derecognition
(2) Mainly DTA
(3) Excluding minority interests
Shareholders’ equity3 evolution (€ mn)
3.055 280
3.054 (28) (158) (58) (37)
Total equity 2015 Continuing operations Restructuring costsand net profit on
disposal of non coreassets
Provisions¹(post-tax)
Other comprehensiveloss
Other Total equity Jun 2016
Profit before provisions
41
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Reduction in Overseas Non-Core Exposures
Overseas non-core exposures (€ mn)
The non-core overseas exposures at 2Q2016 were as follows:
Greece: Net exposure comprised:
a) Net on-balance sheet exposures (excluding foreclosed properties) totalling
€13 mn;
b) 639 foreclosed properties with a book value of €164 mn;
c) off-balance sheet exposures of €119 mn; and
d) lending exposures to Greek entities in the normal course of business in
Cyprus of €81 mn, and lending exposures in Cyprus with collaterals in
Greece of €144 mn.
Romania: Overall net exposure of €262 mn
Serbia: Overall net exposure of €42 mn
Russia: Remaining net exposure (on and off balance sheet) in Russia significantly
reduced to €45 mn during 2Q2016 following the full settlement in cash of the
deferred component of the asset swap arrangement which resulted from the
agreement for the disposal of the Russian operations
As part of the Group‟s strategy of focusing on its core businesses and markets, it
has decided to close of the operations of Bank of Cyprus Channel Islands
Ltd (BOC CI) and to relocate its business to other Group locations. As at 30
June 2016 the gross loans and deposits of BOC CI amounted to €24,5 mn and
€69,4 mn respectively. BOC CI operates through one branch and has one
employee
(1) Lending exposures to Greek entities in the normal course of business in Cyprus and lending exposures in Cyprus with collaterals in Greece
155 120 114 119
45
368
354 312 274
262
54
54
54 54
42
199
192
173 168
164
56
49
22
16
13
133
132
131
122
119
140
139
151
158
225
1.105
1.040
957
911
870
Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Russia: Net exposure Romania: Net exposure
Serbia Greece Foreclosed Properties
Greece net on balance sheet exposure Greece net off balance sheet exposure
Greece other¹
528
512
477
464
521
42
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Appendix II
Asset quality
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
90+ DPD analysis
(€ mn) Jun 16 2015 2014 2013
A. Gross Loans after Fair value on Initial recognition 20.040 21.385 22.206 24.840
Fair value on Initial recognition 1.043 1.207 1.566 1.903
B. Gross Loans 21.083 22.592 23.772 26.743
B1. Loans with no arrears 10.879 10.443 10.065 11.855
B2. Loans with arrears but not impaired 2.607 3.049 4.413 6.733
Up to 30 DPD 574 469 562 823
31-90 DPD 361 351 492 1.063
91-180 DPD 121 144 440 1.316
181-365 DPD 175 259 926 2.099
Over 1 year DPD 1.376 1.826 1.993 1.432
B3. Impaired Loans 7.597 9.100 9.294 8.155
With no arrears 647 876 1.153 934
Up to 30 DPD 25 78 149 168
31-90 DPD 41 24 142 352
91-180 DPD 95 65 143 423
181-365 DPD 123 310 685 1.426
Over 1 year DPD 6.666 7.747 7.022 4.852
(90+ DPD)1 9.269 11.329 12.653 13.002
90+ DPD ratio (90 + DPD / Gross Loans) 44,0% 50,1% 53,2% 48,6%
Accumulated provisions 4.875 5.445 5.140 4.979
Gross loans provision coverage 23,1% 24,1% 21,6% 18,6%
90+ DPD provision coverage 53% 48% 41% 38%
(1) Loans in arrears for more than 90 days (90+ DPD) are defined as loans past-due for more than 90 days and those that are impaired (impaired loans are those which are not
considered fully collectable and for which a provision for impairment has been recognised on an individual basis or for which incurred losses exist at their initial recognition or
customers in Debt Recovery).
+
+
+
+
=
44
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114 90+ DPD by geography (€ bn) 90+ DPD ratios by geography
11,47 11,53 11,48 11,27 10,63
9,60
8,65
0,09 0,11 0,09 0,08
0,07
0,06
0,05
1,09 1,15 1,08
0,65
0,63
0,63
0,57
12,65 12,79 12,65
12,00
11,33
10,29
9,27
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Cyprus UK Other countries
(1) Other countries: Russia, Romania and Greece
90+ DPD by geography
54%
54%
54%
54%
51%
48%
45%
10%
11%
8%
7%
6%
5%
4%
66%
66%
67%
87%
87%
91%
90%
Dec 2014Mar 2015 Jun 2015Sep 2015Dec 2015Mar 2016 Jun 2016
Cyprus UK Other countries1 1
45
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
90+ DPD ratios by business line
Gross loans by business line (€ bn)
(1) As part of the restructuring of the Group, management is currently monitoring the loan portfolio of the Group using new business line definitions. An important component
of the Group‟s new operational structure is the establishment of the RRD for the purposes of centralising and streamlining the management of its delinquent loans.
Analysis of loans and 90+ DPD ratios by business line1
46
4,5
3
2,2
0
3,8
5
1,8
3
2,0
1 3
,36
1,3
9
2,2
0
2,7
1
4,5
9
2,1
4
3,8
0
1,8
0
1,9
7 3
,22
1,3
8 2,2
4
2,7
7
4,3
8
1,8
3
3,7
5
1,4
8
1,9
0 2,9
8
1,4
1 2,3
1
2,8
3
4,2
9
1,7
8
3,6
8
1,4
3
1,8
1 2,9
1
1,3
8 2,4
0
2,9
1 4
,15
1,7
7
3,6
2
1,4
0
1,6
2 2
,76
1,3
5 2,2
3
2,9
4 4
,10
1,7
4
3,6
1
1,3
8
1,3
7 2
,53
1,3
0
2,1
3
2,9
2
Corporate SMEs Housing Consumer Credit RRD-MidCorporates
RRD-MajorCorporations
RRD-SMEs RRD-Recoveriescorporates
RRD-RecoveriesSMEs and Retail
Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
20% 8% 17% 7% 6% 12% 6% 10% 14%
% of total
27%
26%
15%
30%
61%
75%
80%
100%
100%
22%
22%
14%
25%
58%
80%
79%
100%
100%
21%
20%
13%
23%
53%
69%
74%
100%
100%
20%
18%
12%
22%
37%
60%
70%
100%
100%
16%
18%
12%
21%
32%
50%
64%
100%
100%
Corporate SMEs Housing Consumer Credit RRD-MidCorporates
RRD-MajorCorporations
RRD-SMEs RRD-Recoveriescorporates
RRD-RecoveriesSMEs and Retail
Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
90+ DPD by business line1 (€ bn)
1,31 1,23 0,95 0,88 0,84 0,67
0,58 0,56 0,41 0,35 0,32 0,31
0,63 0,59 0,54 0,48 0,45 0,43
0,56 0,53
0,37 0,33 0,31
0,28
2,41 2,43
2,38 2,00
1,65 1,26
1,26 1,20
1,10
0,97
0,60
0,44
1,12 1,10
1,12
1,02
0,94
0,84
2,20 2,24
2,31
2,40
2,23
2,13
2,72 2,77
2,82
2,90
2,95
2,91
12,79 12,65
12,00
11,33
10,29
9,27
Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Corporate SMEs Housing
Consumer Credit RRD-Major Corporations RRD- Corporates
RRD-SMEs RRD-Recoveries corporates RRD-Recoveries SMEs & Retail
(1) As part of the restructuring of the Group, management is currently monitoring the loan portfolio of the Group using new business line definitions. An important component
of the Group‟s new operational structure is the establishment of the RRD for the purposes of centralising and streamlining the management of its delinquent loans
90+ DPD by business line
47
25% reduction
in RRD Major
Corporations
and
Corporates
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
New 90+ DPD formation by business line
90+ DPD inflows down across all three customer segments, led by the Corporate segment
0,29
0,37
0,14 0,20
0,09 0,02 0,02 0,04
0,17
0,10
0,09
0,08
0,06
0,04 0,05 0,05
0,22 0,13
0,11 0,08
0,07
0,05 0,06
0,05
0,68
0,60
0,34 0,36
0,22
0,11 0,13 0,14
3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016
Corporate SMEs Retail
€bn
14% of 3Q2014 level
29% of 3Q2014 level
23% of 3Q2014 level
48
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
90+ DPD ratios by economic activity
Gross loans by economic activity (€ bn)
Analysis of loans and 90+ DPD ratios by economic activity
49
2,5
0
0,9
2
1,6
4 4
,19
3,2
0
7,8
6
2,0
7
1,5
5
2,3
8
0,8
5
1,6
2 4
,14
3,3
8
7,4
1
1,8
4
1,2
4
2,3
6
0,8
3
1,5
7 4
,07
3,4
2
7,3
3
1,7
9
1,2
1
2,2
6
0,8
2
1,4
7 3
,92
3,3
2
7,2
5
1,6
4
1,1
7
2,2
3
0,8
0
1,4
5 3,4
3
3,3
3
7,1
7
1,5
5
1,1
2
Trade Manufacturing Hotels & Restaurants Construction Real estate Private Individuals Professional & otherservices
Other sectors
Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
11% 4% 7% 16% 16% 34% 7% 5%
% of total
48%
54%
57%
80%
48%
38%
57%
64%
49%
54%
59%
79%
48%
36%
62%
57%
48%
54%
46%
76%
47%
36%
57%
56%
44%
49%
38%
68%
46%
35%
54%
58%
42%
50%
34%
65%
39%
35%
49%
56%
Trade Manufacturing Hotels & Restaurants Construction Real estate Private Individuals Professional & otherservices
Other sectors
Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
NPEs analysis
4.944
2.070
1.872
551
2.436
Jun 2016
NPEs with forbearance measures, no impairments, no arrears
NPEs with forbearance measures, no impairments, <90dpd
Not specifically provided
Specifically provided
Recoveries
55,9% 49,3%
15,8%
1,8% 3,1%
67,4%
62,7%
74,8%
77,8%
94,7%
Recoveries Specifically providded Not specificallyprovided
NPEs withforbearance measures,
no impairments,<90dpd
NPEs with forbearancemeasures, no
impairments, noarrears
Provision coverage Tangible Collateral
123,3%
112,0%
90,6%
79,6%
97,7%
Cyprus NPEs – 30.06.2016 Total Coverage for NPEs Cyprus – Adequately provided
11.873
Total coverage (capped MV 2Q16)
50
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
95,0%
0,4%
4,6%
Cyprus UK Other countries¹
13,75 13,86 13,59 13,49 13,26 12,64 11,87
0,11 0,11 0,10 0,08 0,07 0,06 0,05
1,10 1,20
1,12 0,65 0,64 0,63 0,57
14,96 15,17 14,81 14,22 13,97 13,33 12,49
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Other countries¹
UK
Cyprus
NPEs by geography (€ bn)
Total
(1) Other countries: Russia, Greece and Romania
NPEs by geography and customer type
47,9%
26,0%
15,5%
10,6%
Corporate SMERetail Housing Retail Other
As of Jun 2016
…mostly in large corporates and SMEs
8,17 8,18 7,75 7,37 7,19 6,61 5,98
3,53 3,57 3,60 3,51 3,44 3,38 3,25
1,82 1,93 1,95 1,98 1,97 1,97 1,93
1,45 1,49 1,51 1,36 1,37 1,37 1,33
14,96 15,17 14,81 14,22 13,97 13,33 12,49
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016
Retail other
Retail housing
SMEs
Corporate
NPEs by customer type (€ bn)
Total
NPEs are focused in the core Cypriot business…
As of Jun 2016
51
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Performance of restructured loans1
Corporate Total Bank – Cyprus
Retail SMEs
59%
8%
2%
31%
65%
7%
4%
24%
75%
4%
5%
16%
74%
9%
4%
13%
80%
7%
4%
9%
72%
14%
8%
6%
73%
13%
5%
9%
88%
7%
4%
1%
85%
10%
3%
2%
No arrears 1-30 dpd 31-90 dpd Over 90 dpd
79%
8%
74%
6%
0%
20%
85%
3%
1%
11%
81%
1%
7%
11%
94%
2%
1%
3%
91%
0%
3%
6%
98%
0%
1%
1%
82%
2%
2%
14%
98%
0%
2%
0%
95%
2%
1%
2%
No arrears 1-30 dpd 31-90 dpd Over 90 dpd
92%
5%
32%
7%
3%
58%
49%
8%
6%
37%
64%
3%
2%
31%
58%
13%
8%
21%
68%
18%
4%
10%
59%
17%
14%
10%
72%
16%
4%
8%
76%
12%
9%
3%
82%
13%
2%
3%
No arrears 1-30 dpd 31-90 dpd Over 90 dpd
68%
14% 53%
12%
4%
31%
59%
9%
6%
26%
67%
11%
4%
18%
62%
15%
5%
18%
59%
18%
8%
15%
60%
21%
10%
9%
66%
20%
7%
7%
70%
19%
8%
3%
69%
21%
8%
2%
No arrears 1-30 dpd 31-90 dpd Over 90 dpd
64%
10%
1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016
An analysis performed as at 30 June 2016 indicates that on average 79% of the loans restructured post 31 December 2013 for Cyprus operations, have no arrears (restructurings
performed in 2Q2016 were excluded); the average percentage of restructured loans with arrears more than 90 days stands at 8%
Corporate restructured loans exhibit the best performance with an average percentage of restructured loans with no arrears of 92%
(1) The performance of loans restructured during 2Q2016 is not presented in this graph as it is too early to assess it. 52
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Coverage ratio evolution in Cyprus
• The above data is an amalgam of several points
• Low coverage on performing assets that are expected to recover in 12 - 36 months, where the focus is on managing / supporting the relationship through to
profitability and debt repayment
• High coverage on poorly performing assets that are either already in recovery or expected to go into recovery shortly – focus in these cases is on collateral
64%
35% 50%
26% 45%
59%
23%
61% 56% 51% 51%
55%
73% 46% 84%
72% 54%
78%
62% 65% 62% 64%
119%
108%
96%
110% 117% 112%
101%
123% 121% 113% 115%
Corporate SME Consumer Housing RRDCorporations
RRD MajorCorporations
RRD SMEs RRDRecoveriesCorporate
RRDRecoveries
SMEs
RRDRecoveries
Retail
BOC Cyprus
Loan loss reserve coverage Tangible coverage
90+DPD book divided into two broad areas 1) Improving assets with low coverage and 2) Poor quality assets with high
coverage, where the focus is on recovery
53
Total coverage (Jun 2016)
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
54
Collateral split by district
345 345
4.621 3.541
1.613 1.972 1.168 343
1.007
1.007
16
18
3 21
1
476
534
4.637
3.559
1.616 1.993
1.169
2.171
Nicosia Limassol Larnaca Paphos Ammochostos Other BOC Group
Cash Mortgages Assignment of contract of sales Other¹
Indexed capped market value of collateral by district as at 30 Jun 2016 (€ mn)
(1) Other includes Bank & Government Guarantees, Fixed / Floating charge, Shares / Debentures, Vehicles and other collateral
15,144
13,257
47%
11%
27%
7%
1% 7%
Residential - Finished Residential - Land Commercial - Finished Commercial - Land Hotels - Apartments Other
44%
12%
20%
8%
3% 13%
44%
13%
17%
11%
2% 13%
34%
7% 10%
20%
19%
10% 27%
5% 8%
9%
43%
8% 2%
1%
7% 3% 1%
86%
36%
9% 18%
9%
7%
21%
Nicosia
€4,6 bn
Split of mortgage collateral by type as at 30 Jun 2016
Limassol
€3,5 bn
Larnaca
€1,6 bn
Paphos
€2,0 bn
Ammochostos
€1,2 bn
Other
€2,2 bn
BOC Group
€15,1 bn
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Disclaimer
This presentation has been prepared for information and background purposes only. It is confidential and neither it nor any part of it may be
reproduced (electronically or otherwise) or redistributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person
(excluding the recipient's professional advisers) or published in whole or in part for any purpose without the prior written consent of the Bank of
Cyprus Public Company Ltd (the "Bank"). This presentation does not purport to be all-inclusive or to contain all of the information that a person
considering the purchase of any securities of the Bank may require to make a full analysis of the matters referred to herein. Certain statements,
beliefs and opinions in this presentation are forward-looking. Such statements can be generally identified by the use of terms such as “believes”,
“expects”, “may”, “will”, “should”, “would”, “could”, “plans”, “anticipates” and comparable terms and the negatives of such terms. By their nature,
forward-looking statements involve risks and uncertainties and assumptions about the Group that could cause actual results and developments to
differ materially from those expressed in or implied by such forward-looking statements. These risks, uncertainties and assumptions could adversely
affect the outcome and financial effects of the plans and events described herein. We have based these forward-looking statements on our current
expectations and projections about future events. Any statements regarding past trends or activities should not be taken as a representation that
such trends or activities will continue in the future. Readers are cautioned not to place undue reliance on forward-looking statements, which are
based on facts known to and/ or assumptions made by the Group only as of the date of this presentation. The Bank's ability to achieve its projected
results depends on many factors which are outside management's control. Actual results may differ materially from those contained or implied in the
forward-looking statements. We assume no obligation to update such forward-looking statements or to update the reasons that actual results could
differ materially from those anticipated in such forward-looking statements. This presentation does not constitute an offer to sell, or a solicitation of
an offer to buy, any security in the United States, or any other jurisdiction. The delivery of this presentation shall under no circumstances imply that
there has been no change in the affairs of the Group or that the information set forth herein is complete or correct as of any date. This presentation
shall not be used in connection with any investment decision regarding any of our securities, which should only be made based on expressly
authorised materials from us identified as such, nor in connection with any decision whether or how to vote on any matter submitted to our
stockholders. The securities issued by the Bank have not been, and will not be, registered under the US Securities Act of 1933 (“the Securities
Act”), or under the applicable securities laws of any other jurisdiction.
55
